The Gujarat High Court has quashed commodity markets regulator FMC’ order issuing showcause notice to National Multi—Commodity Exchange’s (NMCE) founder and vice-chairman Mr Kailash Gupta for alleged illegal and fraudulent act causing loss to the exchange.
“The impugned order dated July 23, 2011, passed by the Commission is quashed,” the High Court order said.
The Forward Markets Commission (FMC) regulates functioning of 21 commodity exchanges in the country.
The High Court rejected the FMC order on the ground that the “principle of natural justice” was not followed by the regulator while conducting the inquiry.
The court has directed the FMC to conduct a fresh inquiry and submit the report within four months.
The regulator has also been asked to appoint some independent person as Managing Director and CEO of the NMCE in place of Mr Anil Mishra in one week.
The FMC had issued showcause notice to NMCE founder Mr Kailash Gupta based on its 96-page order, in which it had alleged that Mr Gupta breached his fiduciary responsibility to the exchange and “systematically defrauded it, misused and misappropriated its property and committed series of crimes under various laws...for benefiting himself, his family and his family—owned/controlled firms“.
The FMC had also asked the NMCE to initiate process to recover Rs 36 crore and any other illegal payment from him.
Mr Gupta was heading the Ahmedabad-based NMCE as Managing Director and CEO since its inception in 2003 till May 2010.
The NMCE, the country’s third largest commodity bourse, offers an electronic platform for futures trading in plantation, spices, non-ferrous metals and oilseeds.